During the second three months of 2006, IT businesses issued 18 warnings, the highest number announced in five years.
Among all sectors, research by KMPG found that during the second quarter, 84 profit warnings were issued, just one less than the previous three months and a 12.5 per cent decline on the same period last year.
Following software and computer services sector, media was the next worst hit sector with nine warnings followed by food producers with six and general retailers with five.
The most quoted reason for warnings was difficult trading conditions, cited by 43 per cent of businesses, while 20 per cent of companies said contract delays and cancellations contributed to a decline in the bottom line.
Compared to last quarter when 22 per cent of companies said increased overheads hit their numbers, just 11 per cent blamed the factor during the most recent three months.
One overarching reason was companies blaming a delay in signing contracts, with suppliers becoming tougher on negotiations, hitting software and computer services companies in particular.
Revenue recognition also contributed to the sectors woes with contracts becoming more complex.
In total 61 per cent of warnings came from companies listed on the Alternative Investment Market.